LETTER: It has to be single-payer insurance

I got the call today that health insurance costs for my company will be going up by 25 percent this year, after an increase of 34 percent last year. If you want to understand why this can happen so routinely, here are the details.

I buy health insurance for 65 people, just like the company next door that buys health insurance for 143 people.

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In the past two years, I've had four people in my company, long-time employees, diagnosed with serious illnesses requiring substantial care. The company next door had one employee who suffered a serious illness in that time.

The "experience pool" by which the insurance companies calculate their "risk" or "loss" is limited to the 65 people in my firm, so the cost of those four illnesses must be paid for by the premiums of the 65 people covered in my company. Hence, the huge rate increases.

This happens at virtually every business in America that provides health insurance options for its employees.

The workers at the company next door had no major illnesses during that period. Their premiums went up by 9 percent last year and 9 percent again this year. That's because, in their "experience pool" of 143 workers, they were "lucky" to have just one major illness in that time.

So, our health care "experience" is not determined by all the people covered by an insurance company, the entire group of plans like mine combined. It is determined by the specific group of people in a company's plan. If there are 50,000 small businesses in New York, there are 50,000 "experience pools."

But in a single-payer plan, such as those in virtually every other developed nation on the planet, the "experience pool" is the entire population. It is very simple and very accurate, too.

The cost last year of health insurance for those 65 employees was just a little over $800,000. The increase for this year alone is a whopping $200,000.

That $200,000 would have been a 4 percent across-the-board raise for those employees. Instead, it will go to an insurance company to offset their "loss" on that unlucky "pool" of 65 people.

But they won't return one penny for the "excess" premiums they collected from those 50,000 small companies who were "lucky" this year. That has never happened, in my many years of experience.

Small business wants a single-payer health insurance system in the United States, and we want it soon.